Bad news concerning crypto exchange Coinbase, as it recently announced that it is seriously considering withdrawing from the market in Japan.
The collapse of FTX has been a major blow to the US exchange. Coinbase is continuing its downward trend and does not seem to be stopping. After the dismissal of many team members, the news of the possible Japan withdrawal could also disfavor Coinbase in the exchange world.
Why does the crypto exchange Coinbase want to withdraw from the market in Japan?
Since 2021, the California-based exchange has been expanding its business in Japan through a series of partnerships and companies. The partnership with Mitsubishi UFJ Financial Group is the spearhead of their business in Japan. Back in 2016, the Japanese company set its sights on Coinbase, investing about 1 billion yuan, or the equivalent of nearly $8 million on Coinbase.
A 13 January report by Nikkei Asia revealed Coinbase’s willingness to exit the Japanese market. In fact, the San Francisco-based company is considering several alternatives to move away from market operations in Japan. Among the many options is to sell the company and give up its recording license..,
Murugesan, the company’s vice president for international business development, said in an interview Wednesday:
“We decided to reduce most of our operations in Japan, which resulted in the elimination of most of the roles in our Japanese entity.”
He declined to comment on M&A activity regarding the Japanese entity.
Murugesan stressed that Coinbase Japan is in a transition period until talks with Japan’s Financial Services Agency (FSA) are concluded.
Coinbase in the spotlight since early 2023
It begins very frantically for Coinbase in 2023, which has rarely been outside of news and scandals involving it. Since the news of staff layoffs, the US company has started off on a very negative trend.
The influence of FTX has undoubtedly affected many, the whole industry has been affected, but there are those, like Coinbase, who are struggling to recover.
Last week Coinbase, agreed to pay a $100 million settlement to the New York Department of Financial Services because of issues with the company’s compliance programs.
Department Superintendent Adrienne Harris, said:
“It is critical that all financial institutions safeguard their systems from bad actors, and the Department’s expectations for consumer protection, cybersecurity and anti-money laundering programs are just as stringent for cryptocurrency companies as they are for traditional financial services institutions.
Coinbase failed to build and maintain a functional compliance program that could keep pace with its growth. This failure has exposed the Coinbase platform to potential criminal activity requiring the Department to take immediate action, including the installation of an independent monitor.”
Coinbase violated several New York banking laws as well as state regulations related to crypto, information monitoring and cybersecurity. Coinbase has been unable to keep up with the growth in the volume of alerts generated by its TMS.
By the end of 2021, Coinbase’s inability to keep up with its alerts resulted in a significant and growing backlog of more than 100,000 unreviewed transaction monitoring alerts.
Meanwhile, this week, Coinbase finds itself embroiled in another round of layoffs, its staff cuts continuing once again.
In short, it is really not a good time for one of the most important exchanges in the cryptocurrency industry. Certainly the bearish period is holding it back a lot in this downtrend. In the meantime, let’s follow the news and insights related to the case, with the hope that 2023 will also turn positive for the US exchange.
